What Can You Buy With The New Minimum Wage?

‘Responding’, and I use that term loosely, to rising costs across the board, the government has decided to raise the national minimum wage by 70 cents.

Yesterday it went from $5.85 to $6.55, which might seem like a significant increase, but when you factor in the new higher costs for fuel, inflation, bus fares, groceries, and just about everything else, the people in desperate need of a pay increase will still be struggling.

In a minute we’ll try and figure out what you can actually buy for $6.55 these days.

But before that, take a look at this from an Associated Press report which paints an even bleaker outlook:

The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.

Twenty-three states and the District of Columbia have laws making the minimum wage higher than the new federal requirement, a group covering 60 percent of U.S. workers, according to the Economic Policy Institute, a think tank.

Some bloggers think even less of it. Don Boudreaux at Cafe Hayek said this about the increase:

Maybe it is that trivial, considering that the majority of those extra costs taken on by business owners to pay the new minimum wage will be passed along to the consumers. Restaurants employing minimum wage dishwashers will have more expensive menus and so on.

It seems as if the minimum wage these days is more of a political tool than the needed economic help it was designed for. Just look at how California Governor Schwarzenegger is threatening to pay all state employees minimum wage unless his new budget gets passed. He says he’ll retroactively pay them their full salaries one the legislation goes through, but seriously how can those people affect the scenario?

Getting back on track here – even though for a period of time earlier this summer it appeared as if gas prices might actually hit a $6.55 mark, they are due to fall below $4 a gallon this weekend. In spite of that, what can you actually buy for $6.55 these days?

Here’s some stuff I came up with. For $6.55, the price of the new hourly minimum, you can purchase: